Chapter 6

Annexes

This chapter presents several tools to help BDS and credit providers with screening, mitigation and monitoring. First, the sample program-level screening form in Annex A will help identify those proposed programs which may not be allowed or for which mitigation is required by USAID Regulation 216. However, USAID Regulation 216 does not directly address many of the activities undertaken by MSEs that may be damaging to the environment—or raise awareness of many of the cleaner production opportunities that could cost-effectively mitigate those impacts and improve financial viability of enterprises. Annexes B and C are designed to help users of these guidelines identify those potentially damaging enterprises not expressly covered under Regulation 216, and to focus in on critical adverse impacts and a more complete range of mitigation opportunities.

To help readers orient themselves, Annex B lists dozens of types of enterprises that commonly receive development assistance and divides them into three groups: (1) those that are expected to have beneficial impacts on the environment, (2) those expected to have minimal adverse environmental effects, and (3) those that are expected to have potentially significant adverse effects. Some BDS and credit providers will likely wish to develop much more targeted lists for subsectoral screening purposes, depending upon the types of enterprises with which they work frequently and about which more information is available. For instance, BDS and credit providers could focus most screening activities upon types of MSEs covered in the Cleaner Production Fact Sheets (see Chapter 4).

For those BDS and credit providers wishing to conduct a more detailed screening, Annex C provides a sample enterprise-specific questionnaire, because knowing only the type of enterprise may be insufficient to fully understand the scope and scale of its potential environmental impacts. Several important enterprise-specific factors may also be considered, including the nature of the proposed activities and their magnitude, scale, location, duration of impact, importance, and environmental context. Helping MSEs fill out a screening questionnaire facilitates this evaluation for a second level of screening, which may be most useful in unusual cases, given the additional resources required to conduct such an assessment. The Cleaner Production Fact Sheets in Chapter 4 could be used to develop custom sector-specific screening forms.

Annexes D and E provide supplemental tools to assist BDS and credit providers in improving MSEs’ environmental performance. Annex D is a sample Environmental Commitment Statement for MSEs, because assistance providers may wish to obtain such mitigation commitments from those assistance applicants whose activities are likely to have impacts of concern. Annex E provides sample terms of reference that may be modified when hiring environmental consultants.
Annex A: Sample Environmental Screening/Report Form for MSE Assistance Programs[1]

Program information

Program name: ______

Type of Enterprise(s) to be supported:______

Geographic Location:______

Business Description: Describe purpose/outputs of the enterprise and environmental impact of the business. Attach extra pages if more space is needed.

Description of Support for Enterprise(s): Describe proposed support to be provided to the enterprise or enterprises (e.g., financing or services to be provided). Note anticipated environmental impacts of support. Attach extra pages if more space is needed.

Step 1. Determine Category of Request:

Follow the checklists in this section to determine which one of the following three categories applies to the MSE activity. In considering potential adverse environmental impacts, program planners should be careful to consider collective impacts of MSEs and the potential for MSE programs to exacerbate existing environmental problems.

  • Category A: No Further Environmental Review May Be Required. Is the request exclusively to provide technical assistance, training, institutional strengthening, or research, education, studies or other information analysis, awareness-building or dissemination activities with no foreseeable negative impact on the biophysical environment? This probably qualifies as a Category A activity—no further environmental review or action may be necessary. Complete form to establish this circumstance.
  • Category B: An Environmental Review Report Is Needed. Does the request include funds or technology transfer to support any physical natural resource management activities, or any community and rural development services, infrastructure, public facilities or road rehabilitation? Does it involve development of income-generating or resource management systems, or certain kinds of applied ecological or natural resources research? If so, it will likely require an Environmental Review of the kind described in Step 4 of this form. Determine which Category the request falls under, to establish the type of environmental review that may be required.
  • Category C: Significant Environmental Impacts Likely; Environmental Review Required, and Environmental Assessment Likely to Be Required. Is the activity one that normally requires an environmental assessment, as defined by USAID Regulation 216?

Category A—No Formal Environmental Review Needed:
If you answer “yes” to any of the following questions, this assistance request will probably not require a formal Environmental Review. However, it is recommended that you proceed to review of the Category B and C checklists, to ensure entire assistance request qualifies for Category A. Then proceed to Step 2.

Does the assistance request ONLY involve (yes, no, N/A):

Provision of education, technical assistance, or training. Does not qualify for “Category A” if such programs include activities directly affecting the environment.

Support for intermediate credit arrangements (only when no significant biophysical environmental impact can reasonably be expected).

Community awareness initiatives.

Controlled experimentation exclusively for the purpose of research and field evaluation confined to small areas (normally under 4 ha., i.e., 10 acres) and carefully monitored (when no protected or other sensitive environmental areas could be affected).

Technical studies and analyses and other information generation activities not involving intrusive sampling of endangered species or critical habitats.

Document or information transfers.

Nutrition, health care or family planning. Such programs do not qualify for “Category A” if (a) some included activities could directly affect the environment (construction, water supply systems, etc.) or (b) biohazardous (esp. HIV/AIDS) waste is handled or blood is tested.

Rehabilitation of water points for domestic household use, shallow, hand-dug wells or small water storage devices (when no protected or other sensitive environmental areas could be affected).

Construction or repair of facilities if total surface area to be disturbed is under 10,000 sq. ft. (approx. 1,000 sq. m.) (and when no protected or other sensitive environmental areas could be affected).

Studies or programs intended to develop the capability of recipients to engage in development planning. Do not mark "yes" if these involve activities directly affecting the environment.

Category B: Adverse Environmental Iimpacts Possible, Environmental Review Required (Specific Conditions, Including Monitoring, May Be Applied):
Note: The Environmental Review (Step 4 below) must address why there will be no potential adverse impacts on protected areas, endangered or threatened species or their critical habitat; or relatively undegraded forest. I.e., justify your conclusion that the proposed Category B activities do not belong in Category C. Even for activities designed to protect or restore natural resources, the potential for environmental harm exists (e.g., re-introduction of species, controlled burning, fencing, wildlife water points, spontaneous human population shifts in response to loan or technical support activities undertaken, etc.). If you do not find an exact match listed here for the activity you are undertaking, and it is not in Category A or C, then use the last item in Category B to describe the activity and treat it as Category B for purposes of environmental review.

Does the loan involve (yes, no, N/A):

______Small-scale activities in agriculture, natural resources management, sanitation, etc. (list and scale to be defined mutually among the appropriate partners, whether donor or host country agencies).

______Controlled experimentation exclusively for the purpose of research and field evaluation (areas of 4 ha. or more, i.e., 10 acres) and carefully monitored, when neither protected or other sensitive environmental areas could be adversely affected, nor threatened and endangered species and their habitat jeopardized.

Small-scale construction or rehabilitation of facilities or structures in which the surface area to be disturbed exceeds 10,000 sq. ft and funding level is not in excess of $200,000 and where no protected or other sensitive environmental areas could be affected.

Minor construction or rehabilitation of rural roads of less than 10 km in length (with no change in alignment or right of way), with ecologically sensitive areas at least 100 m away from the road and not affected by construction or changes in drainage; likewise, no protected areas or relatively undegraded forest should be within 5 km of the road.

Nutrition, health care or family planning, if (a) some included activities could directly affect the environment (construction, water supply systems, etc.) or (b) biohazardous (esp. HIV/AIDS) waste is handled or blood is tested.

______Construction or rehabilitation of small-scale water points or water storage devices for domestic or non-domestic use, not covered in Category A, when neither protected or other sensitive, environmental areas could be adversely affected nor endangered and threatened species jeopardized.

Quantity imports of commodities such as fertilizers.

Technical studies and analyses and other information generation activities that could involve intrusive sampling, including aerial surveys, of endangered species or critical habitats.

Small-scale use of USEPA-registered least-toxic general-use pesticides, limited to supervised use by farmers, demonstration, training and education, or emergency assistance. Environmental review must be carried out consistent with USAID Pesticide Procedures as required in Reg. 16 [22 CFR 216.3(b)(1)].

______Other activities not in Category A or Category C. These may include many sorts of small-scale manufacturing.

Category C: Significant Environmental Impacts Likely. Environmental Review Required, and Environmental Assessment Likely to Be Required:
The below Category C activities are consistent with USAID criteria for activities that normally require an Environmental Assessment, as defined by USAID’s Regulation 216. It is recognized that some of these categories are ambiguous. Mark “yes” if they apply, and show in the Environmental Review (Step 4) the extent and magnitude of activities and their impacts, so that USAID and its partners can determine if an EA is necessary or not.

Does the assistance request involve (yes, no, N/A):

Light industrial plant production or processing (e.g., sawmill operation, agro-industrial processing of forestry products)

River basin or new lands development

Planned resettlement of human populations

Penetration road building, or rehabilitation of roads (primary, secondary, some tertiary) over 10 km length, and any roads which may pass through or near relatively undegraded forest lands or other sensitive ecological areas

Substantial piped water supply and sewerage construction

Major borehole or water point construction

Large-scale irrigation

Water management structures such as dams and impoundments

Drainage of wetlands or other permanently flooded areas

Large-scale agricultural mechanization

Agricultural land leveling

Procurement or use of restricted use pesticides, or wide-area application in non-emergency conditions under non-supervised conditions

Potential to significantly degrade protected areas, such as introduction of exotic plants or animals

Potential to jeopardize threatened & endangered species or adversely modify their habitat (esp. wetlands, tropical forests)

Step 2. Summarize and Itemize Activites:

List ALL activities in the category A, B and C checklists to which to which YES was answered.

Category / Funding / Activity/Sub-Activity

(expand this table as required)

Step 3. Determine Need to Prepare Environmental Review.
  • If all activities are in Category A, sign and date the form. Your development project does not require a formal Environmental Review under Regulation 216.
  • For any activities in Category B and C, prepare an Environmental Review Report assessing all of these activities' impacts. For all Category B and C activities, proceed to Step 4 to prepare Environmental Review.
  • Note that if USAID confirms the Category C determination, further documentation will be required.
Step 4. Prepare Environmental Review

Environmental reviews must be prepared for all Category B and C Activities.

Suggested Format for Environmental Review: The Environmental Review should be about 3–5 pages long (more if required) and consist of following sections:

1.Background, Rationale and Outputs/Results Expected
Summarize and cross-reference proposal if this review is contained therein.

2.Activity Description
Succinctly describe location, siting, surroundings (include a map, even a sketch map). Provide both quantitative and qualitative information about actions needed during construction, how intervention will operate and any ancillary development activities that are required to build or operate the primary activity (e.g., road to a facility, need to quarry or excavate borrow material, need to lay utility pipes to connect with energy, water source or disposal point or any other activity needed to accomplish the primary one but in a different location). If various alternatives have been considered and rejected because the proposed activity is considered more environmentally sound, explain these.

3.Environmental Situation
Affected environment, including essential baseline information available for all affected locations and sites, both primary and ancillary activities.

4.Evaluation of Activities and Issues with Respect to Environmental Impact Potential.
Include impacts that could occur before construction starts, during construction and during operation, as well as any problems that might arise with restoring or reusing the site, if the facility or activity were completed or ceased to exist. Explain direct, indirect, induced and cumulative effects on various components of the environment (e.g., air, water, geology, soils, vegetation, wildlife, aquatic resources, historic, archaeological or other cultural resources, people and their communities, land use, traffic, waste disposal, water supply, energy, etc.). Indicate beneficial impacts and how the natural resources base will be sustainably improved.

5.Environmental Mitigation Actions (including monitoring and evaluation
For example, indicate means taken to avoid, reduce or compensate for impacts, such as restoration of borrow or quarry areas, replanting of vegetation, compensation for any relocation of homes and residents. Indicate how mitigative measures will be monitored to ensure that they accomplish their intended result or what monitoring might be needed for impacts about which there is uncertainty. Provide specifics on who will be responsible for mitigation and monitoring.

6.Other Information (as appropriate)
Where possible, include photos of the site and surroundings; list the names of any reference materials or individuals consulted.

Note: Specific plans for monitoring of key environmental indicators and mitigation of impacts during activity implementation are especially important; these must be addressed in the review. Information on monitoring results and mitigation of impacts are to be included in all progress reports. The review should also assess the degree to which the activity or activities are part of an integrated natural resource planning and management framework framework that considers the appropriate use of multiple resources.

Drafted by:______Date: ______

Reviewed by:______Date: ______

Environmental Guidelines Part III: Micro- and Small Enterprises Page 6-1

Chapter 6 AnnexesAugust 2006

Annex B: Classifying MSEs as Damaging or Not[2]

MSE Classification Scheme

In MSE assistance programs, it is recommended that MSEs receiving services or credit be classified as follows with respect to their environmental impact:

Group IActivities designed to have beneficial impacts on the environment (Note that such activities can have adverse impacts if poorly designed)

Group II Activities that typically have no, or limited, adverse effects.

Group IIIActivities expected to have potential adverse environmental impacts.

Group I: MSEs Designed to Have Beneficial Impacts on Environment (Can Have Adverse Impacts)

  • Environmental and natural resource protection institutions
  • Environmental education services
  • Fish hatcheries of native species for repopulation of public watercourses
  • Green (environmentally friendly) businesses
  • Management of microwatersheds
  • Nurseries and reforestation with native species
  • Professional environmental and ecological services (waste collection, urban beautification)
  • Protection of historical monuments
  • Protection of public areas
  • Public libraries, museums, botanical gardens
  • Raising of endangered species
  • Sanitary and similar service activities
  • Surveillance of national parks and reserves

Group II: MSEs Expected to Have Minimal Adverse Environmental Effects

  • Authors, composers and artists
  • Barber and beauty shops
  • Communications
  • Domestic services
  • Exhibition of films and video tapes
  • Public instruction
  • Radio and television broadcasting
  • Repair of footwear and leather articles
  • Retail trade
  • Sale of foods and beverages
  • Sale of furniture and other household articles
  • Sale of hardware and electrical appliances
  • Sale of machinery for maintenance, industry, etc.
  • Sale of textiles and clothing
  • Services for companies
  • Stores and shops
  • Theatrical productions
  • Watch, clock and jewelry repair

Group III. MSEs Expected to Have Potential Adverse Environmental Impacts

  • Agricultural machinery and equipment manufacturing
  • Agricultural production (see Small-Scale Guidelines on agricultural production)
  • Animal feed manufacturing
  • Bakery products manufacturing
  • Batteries manufacturing and repairing
  • Candles, matches manufacturing
  • Canning of fruits
  • Carpets and rugs manufacturing
  • Cement, lime and plaster manufacturing
  • Chemical products manufacturing
  • Chocolate and sugar confectionery manufacturing
  • Clay, china, porcelain objects manufacturing
  • Construction
  • Containers and boxes of paper and paperboard manufacturing
  • Cordage manufacturing
  • Cutlery and general hardware manufacturing
  • Dairy products manufacturing
  • Distilling and rectifying of spirits
  • Drugs and medicines manufacturing
  • Electric equipment manufacturing
  • Electrical appliances manufacturing
  • Electrical repair shops
  • Engines and turbines manufacturing
  • Fertilizers and pesticides manufacturing
  • Fishing
  • Footwear, except rubber footwear manufacturing
  • Fur dressing and dying
  • Furniture and fixtures, except of metal manufacturing
  • Furniture and fixtures primarily of metal manufacturing
  • Gas manufacturing and distribution
  • Glass and glass products manufacturing
  • Grain mill products manufacturing
  • Hunting, trapping, repopulation
  • Industrial chemicals, except fertilizers manufacturing
  • Industrial machinery and equipment, except woodworking machinery manufacturing
  • Iron and steel basic industries
  • Jewelry and related articles manufacturing
  • Knitted fabrics manufacturing
  • Leather products, except footwear manufacturing
  • Livestock farming (not covered by these guidelines)
  • Machinery and equipment except electrical
  • Manufacturing industries
  • Medical, dental, paramedical, and veterinary services
  • Metal and woodworking machinery manufacturing
  • Metal products manufacturing
  • Motorcycles and bicycles manufacturing
  • Musical instruments manufacturing
  • Nonferrous metal basic industries
  • Nonmetallic mineral products manufacturing
  • Other repair shops
  • Other textiles manufacturing
  • Paints, varnishes and lacquers manufacturing
  • Paper and paperboard articles manufacturing
  • Pharmacies
  • Photographic and optical goods manufacturing
  • Photographic studios, commercial photography
  • Plastic footwear manufacturing
  • Plastic products manufacturing
  • Printing, publishing and allied industries
  • Products of petroleum and coal manufacturing
  • Pulp, paper and paperboard manufacturing
  • Radio, television and communications equipment manufacturing
  • Repair of motor vehicle, motorcycles, bicycles
  • Resins and plastics materials, except glass manufacturing
  • Restaurants, cafes, and other eating and drinking places
  • Rubber products manufacturing
  • Sale of industrial minerals, metals, chemicals
  • Sale of raw agricultural materials
  • Sawmills, planing and others
  • Scientific research institutions
  • Ship building and repairing
  • Slaughtering and preparing meat
  • Soap, perfumes and cosmetics manufacturing
  • Soft drinks manufacturing
  • Sports goods manufacturing
  • Storage and warehousing
  • Straw hats manufacturing
  • Structural clay products manufacturing
  • Structural metal products manufacturing
  • Tanning and dressing of leather
  • Textiles, except straw hats manufacturing
  • Textiles (spinning, weaving, and finishing textiles, including bleaching and dyeing)
  • Transport equipment manufacturing
  • Various food products manufacturing
  • Vegetable and animal oils and fats manufacturing
  • Veterinary medications manufacturing
  • Wood and cork products manufacturing
  • Wooden and cork containers manufacturing

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